The Texas Lottery Commission (TLC) and its former director Gary Grief are under fire over allegations of fraud pertaining to a multimillion-dollar jackpot.
The TLC and Grief are under legal scrutiny after state lawmakers proposed a ban on lottery courier services during a Senate Finance Committee. The proposed ban stemmed from the $95 million Lotto Texas Jackpot drawing awarded to Rook TX in April 2023. Rook TK, a group of investors, spent more than $25 million to purchase a large number of ticket combinations for the jackpot, according to an investigation by the Houston Chronicle.
The alleged misconduct by Rook TK drew the attention of lawmakers this week with the Senate Finance Committee accusing the TLC of ignoring money laundering and allowing underage ticket purchases. The committee highlighted a recent rule change that was implemented after the Houston Chronicle’s probe. The rule limited the number of ticket terminals after the TLC provided extra terminals to businesses that had deals with Rook TK.
The TLC changed its ruling ahead of a scheduled Sunset Review.
Alleged scheme leads to class action lawsuit
The alleged misconduct by the TLC and Grief has led to a class action lawsuit.
Earlier this month, LottoReport.com founder Dawn Nettles filed the suit in Harris County District Court alleging its defendants of hosting a “long-running fraud scheme.”
Nettles has named Grief, Lottery.com, Rook TX and IGT Solutions as defendants in the suit. IGT has been included in the suit for its delivery of lottery terminals across Texas.
“My client believes that this criminal conspiracy started in 2017 when Gary Greif traveled to California to lobby the founders of Lottery.com to relocate their business to Austin,” said Nettles’ attorney Manfred Sternberg during the Senate Finance Committee panel earlier this week. “From that moment on, until Mr. Grief’s sudden retirement in early 2024, the Lottery Commission and Lottery.com became a combined single criminal entity.”
According to court documents, Lottery.com founder Ryan Dickerson purchased 142 winning lottery tickets over a three-year period. The tickets included a $50,000 Powerball win in 2020. A year later, Dickerson would purchase another winning $50,000 Powerball.
Dickerson was relieved of his duties by Lottery.com in 2022 after being terminated for cause. The company would later replace its entire executive team and board of directors.
“Lottery.com completely cleaned house in late 2022 replacing its entire board of directors and executive management team. No current officer of the company was in an executive role during the time that any of the alleged events took place,” a company spokesperson said. “The Company has and continues to fully cooperate with all federal, state and local authorities with respect to any investigations into the company’s past business practices. The company’s current management remains dedicated to acting with integrity and in full compliance with laws governing responsible gaming to create value for all its shareholders,” Lottery.com said in a statement to the Senate Finance Committee.
Former executive denies any wrongdoing
Nettles’ suit claims Lottery.com and Grief manipulated the Texas Lottery and violated state and international laws by selling lottery tickets across state lines and international borders.
Grief, who retired in February 2024, has denied any wrongdoing amid the accusations.
“Gary Grief served the Texas Lottery Commission as executive director for approximately 15 years. He is proud of what he and his dedicated staff accomplished during those years,” said Grief’s attorney Sam Bassett. “Gary adamantly denies being part of any dishonest, fraudulent or illegal scheme during his tenure and looks forward to cooperating in any official inquiry addressing the allegations being made.”
Lawmakers have voiced their desire for the Attorney General’s office to initiate an investigation into the matter while the Texas Gaming Commission starts its own probe.
The TLC is also seeking clarity from the Attorney’s General Office over what entity has regulatory authority over lottery courier services in the state. Last week, the TLC sent a 10-page letter to the Attorney General’s office regarding the regulation of courier services.
The TLC is also asking for clarity on licensing and peer-to-peer sales for ticket sellers.
